Starbucks' Pumpkin Spice Latte Returns, Signaling Fall Amid Declining Sales

Starbucks is releasing its popular Pumpkin Spice Latte (PSL) on Tuesday, marking the unofficial start of fall. The drink is expected to boost sales, as it has in previous years. However, the company is struggling with declining transactions and revenue, and has undergone changes under new CEO Brian Niccol to revive its brand. The PSL has become a cultural phenomenon since its 2003 launch, spawning a range of pumpkin-flavored products.

Starbucks (NASDAQ: SBUX) is set to release its popular Pumpkin Spice Latte (PSL) on Tuesday, marking the unofficial start of fall. The seasonal beverage, which has become a cultural phenomenon since its 2003 launch, is expected to boost sales, as it has in previous years [2]. The PSL's return coincides with the company's ongoing efforts to revitalize its brand under new CEO Brian Niccol, who took the helm last September [3].

The PSL has evolved into a signature fall drink, available hot, iced, or blended, and topped with whipped cream and pumpkin pie spices [2]. This year's launch comes alongside new menu additions, such as the Pecan Oatmilk Cortado, and returning favorites like the Pumpkin Cream Cold Brew and Iced Pumpkin Cream Chai [2]. The company's fall menu also features the new Italian Sausage Egg Bites and returning Pumpkin Cream Cheese Muffin and Raccoon Cake Pop [2].

Despite the anticipated sales boost from the PSL, Starbucks is facing challenges with declining transactions and revenue. The number of transactions at stores open at least a year has declined in every quarter, as has revenue in those stores [3]. The company's net income plunged nearly 50% in the most recent quarter, leaving year-to-date profits down about 40% [3]. Niccol has implemented a series of changes to try to revive the brand, including tweaking employee uniforms, overhauling the menu by cutting 30% of its offerings, and testing a new café design that encourages lingering customers [3].

In response to softening U.S. demand, Starbucks has announced plans to scale back production at its U.S. coffee plants to a five-day schedule from January [4]. The company is also pursuing other cost-cutting measures, including capping annual raises for salaried employees in North America at 2% [4]. The goal is to redirect savings toward improving stores and customer experience while managing softer sales momentum.

The PSL's return is likely to cause a spike in Starbucks sales, as it did last year when it was released on August 22, causing a 24.1% surge in sales above the normal Thursday average [3]. However, the company's long-term success will depend on its ability to address the underlying issues that have led to declining transactions and revenue.

References:
[1] https://www.facebook.com/njpdda/posts/news-bulletin-tomorrow-826-pumpkin-spice-latte-is-back-at-starbucks-too-soonhttp/1234010835405097/
[2] https://seekingalpha.com/news/4488930-autumn-in-august-starbucks-brings-pumpkin-spice-latte-back-to-its-menu
[3] https://www.cnn.com/2025/08/26/business/starbucks-pumpkin-spice-latte-returns
[4] https://investinglive.com/stock-market-update/icymi-starbucks-to-cut-us-coffee-plant-output-by-two-days-every-week-demand-softens-20250824/